2015 Year in Review

2015 has been widely sensationalized as the “worst year in the stock market since 2008.” Given the six-year bull run coming off of 2008 (the worst year in seventy years) we were long overdue for a little breather, a step back. But even so 2015 is more accurately and mundanely best described as “flat” with large cap US stocks up or down a little depending on the index, small cap and international stocks down a little more than large cap US stocks, and bonds for the most part, treading water. 2015 was mostly a much ado about nothing.

The prognosticators predicted from doom & gloom to record returns and everywhere in between for 2015, but most predictions hinged more on what the fortune teller was selling. In reality, the market ended pretty solidly in between the worst and best case scenarios. I don’t recall anyone predicting a “flat” market for 2015, but then again such a prediction would not have been very memorable or press worthy.

When you get right down to it, the stock market is driven plain and simple by corporate earnings. The market is a barometer of the earnings that culminate from everyone who works for or buys from a publicly traded company and indirectly, most private companies too. As long as the cumulative forces of labor and spending persist, the long-term prognosis will be solidly positive.

While the stock market has its shortcomings, it is open to everyone and discriminates against no one. All you have to do is show up, invest and commit – easier some years than others – but over the long term it is a commitment that is amply rewarded. A powerful force for the creation of wealth.
My prediction for 2016, despite the inauspicious start thus far, the stock market will be up or down but more likely up, same as it has been in three out of four of the last two hundred years.

Happy New Year!

Scripophily: the study and collection of stock and bond certificates